Washington's efforts to balance the budget are holding back the wobbly economic recovery.
After "fiscal cliff" fears brought the economy to a near standstill late last year, many forecasters had expected growth to come roaring back in the first quarter as consumers made up delayed spending and businesses filled deferred job openings and restocked depleted inventories.
But the Commerce Department's latest read on growth Friday showed U.S. gross domestic product expanding by 2.5 percent in the first three months of the year, less than the 3.1 percent pace forecasters had expected.
(Read More: Oops! Economic Growth Wasn't So Great After All)
Analysts say deficit-cutting moves, including a 2 percent payroll tax hike that kicked in Jan. 1 and the ongoing the federal budget cutting known as sequestration, are beginning to take a bite out of growth. That's expected to continue later this year.
"The economy continues at a brisk walk at best," said Joel Naroff, chief economist at Naroff Economic Advisors. "With the tax hikes reducing disposable income and sequestration restraining federal spending, don't expect strong economic growth anytime soon."
More From NBCnews.com:
Economy Rebounds, but Less Than Expected
Spring Floods Are Here. Are You covered?
Survey: Americans Feeling More Secure About Jobs
Friday's report said government spending in the first three months of the year fell by 4.1 percent, led by an 11.5 percent drop in defense spending.